Is comprehensive insurance worth it? This question is about Best Comprehensive Car Insurance

Comprehensive insurance is worth it if the premium is a small percentage of the car’s value. Comprehensive insurance might also be worth it if the policyholder cannot afford to replace the vehicle without comprehensive coverage, or if the car is driven or parked in a particularly risky area. Although comprehensive insurance is not mandatory in any state, dealerships and lenders frequently require comprehensive insurance, along with collision coverage, on leased or financed cars. In that case, comprehensive insurance is definitely worth it, because failing to meet the lender’s or lessor’s requirements could result in expensive force-placed insurance or even repossession. Factors to Consider When Deciding If Comprehensive Insurance Is Worth It Your car’s age, mileage, and value. The cost of comprehensive insurance premiums. The risk of theft, vandalism, and natural disasters in your area. Your ability to pay for repairs or a replacement vehicle out of pocket. An old rule of thumb recommended dropping comprehensive coverage when a car was five to six years old or had 100,000 miles. But this rule is now outdated, since newer cars have increased longevity alongside higher repair costs. Now, the standard rule is that comprehensive and collision coverage are both worth buying if the combined premium is less than 10% of the car’s value, minus the deductible. Cost is only one factor, however, so you should also consider how likely you are to file a claim, as well as what would happen to you financially if your car was stolen or destroyed by something other than an accident and you didn’t have coverage. For instance, if theft, animal collisions, or natural disasters are particularly common in your area, you are especially likely to need comprehensive insurance. Similarly, even if your comprehensive premium is 15% of your car’s value, for example, comprehensive insurance might still be worth it if you rely on the car and can’t afford to replace it yourself.

Ad Disclosure Ad Disclosure

Is comprehensive insurance worth it?

Answer Question Report Abuse

This question is about Best Comprehensive Car Insurance

see this user

WalletHub, Financial Company

@WalletHub • 07/09/21 This answer was first published on 11/30/20 and it was last updated on 07/09/21.For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

Permalink Report Abuse

Comprehensive insurance is worth it if the premium is a small percentage of the car’s value. Comprehensive insurance might also be worth it if the policyholder cannot afford to replace the vehicle without comprehensive coverage, or if the car is driven or parked in a particularly risky area.

Although comprehensive insurance is not mandatory in any state, dealerships and lenders frequently require comprehensive insurance, along with collision coverage, on leased or financed cars. In that case, comprehensive insurance is definitely worth it, because failing to meet the lender’s or lessor’s requirements could result in expensive force-placed insurance or even repossession.

Factors to Consider When Deciding If Comprehensive Insurance Is Worth It

Your car’s age, mileage, and value.
The cost of comprehensive insurance premiums.
The risk of theft, vandalism, and natural disasters in your area.
Your ability to pay for repairs or a replacement vehicle out of pocket.

An old rule of thumb recommended dropping comprehensive coverage when a car was five to six years old or had 100,000 miles. But this rule is now outdated, since newer cars have increased longevity alongside higher repair costs. Now, the standard rule is that comprehensive and collision coverage are both worth buying if the combined premium is less than 10% of the car’s value, minus the deductible.

Cost is only one factor, however, so you should also consider how likely you are to file a claim, as well as what would happen to you financially if your car was stolen or destroyed by something other than an accident and you didn’t have coverage. For instance, if theft, animal collisions, or natural disasters are particularly common in your area, you are especially likely to need comprehensive insurance. Similarly, even if your comprehensive premium is 15% of your car’s value, for example, comprehensive insurance might still be worth it if you rely on the car and can’t afford to replace it yourself.

Answer Question

What is a good comprehensive deductible?

A good comprehensive deductible is an amount that the policyholder can afford to pay if their vehicle is suddenly damaged by something other than a car accident, such as vandalism or a natural disaster. Comprehensive insurance deductibles typically range from $100 to $1,000, but they can sometimes be as high as $2,500. You choose your ... read full answer deductible when you purchase your policy, and the higher the deductible is, the lower your premium will be.

Comprehensive Deductible Example

As a reminder, a comprehensive deductible is the amount that you have to pay out-of-pocket when filing a comprehensive insurance claim. For example, if a hailstorm causes $5,000 in damage to your car and you have a $1,000 deductible, your insurance company will only pay $4,000 for the repairs.

How to Choose Your Comprehensive Deductible

Before you decide on a deductible, you should consider how likely you are to file a comprehensive claim. If you live in an area that is prone to natural disasters or has a high crime rate, for instance, it may be a good idea to get a low comprehensive deductible.

show less

What is comprehensive insurance?

Comprehensive insurance is coverage that helps pay for the cost of damage to your vehicle when you're involved in an accident not caused by a collision. Comprehensive car insurance covers losses from things like theft, vandalism or extreme weather events.

Comprehensive coverage is never required by state law, but it is usually needed for cars that are leased or financed.... read full answer

What Comprehensive Insurance Covers

Theft

Vandalism

Damage from falling objects

Flood damage

Fire damage

Damage from animals

Damage from natural disasters

Glass damage, such as a cracked windshield

Why You Should Get Comprehensive Insurance

You should consider buying comprehensive coverage if you cannot afford to pay out of pocket to repair or replace your car in a worst-case scenario. Comprehensive insurance is usually considered to be a good investment since it’s cheaper than other types of car insurance and covers events that are out of your control as a driver. A good rule of thumb is that if the cost of comprehensive insurance exceeds 10% of your vehicle’s value, you can consider dropping it.

To learn more, check out WalletHub’s guide to comprehensive insurance.

show less

When should you drop comprehensive insurance?

You should drop comprehensive insurance when you can afford to repair or replace your car out of pocket in a worst-case scenario. You should not drop comprehensive insurance if the car is valuable, since the coverage is inexpensive and will usually pay up to the car’s actual cash value, minus a deductible. Additionally, you definitely should not drop comprehensive coverage if it’s required by your lender or lessor. Doing so can result in serious ... read full answer consequences like force-placed insurance and even repossession.

Comprehensive insurance is sometimes considered “bad luck” insurance, since it covers things that are mostly out of your control as a driver, like vandalism, theft, natural disasters or hitting a deer. A standard rule of thumb is to drop collision and comprehensive insurance when the combined premiums are more than 10% of your car’s value, minus your deductible.

However, you should only consider this guideline within the context of your personal circumstances. It’s also worth noting that many experts consider comprehensive insurance to be a better investment than collision coverage, since it is not affected by your driving habits and is generally cheaper.

In addition to your car’s value and your own finances, how likely you are to file a claim should factor into whether or not you drop comprehensive car insurance coverage. For example, even if you could comfortably replace your car, it probably isn’t smart to drop comprehensive insurance if you live in an area with frequent hurricanes.

show less

WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.

WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by WalletHub. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.

Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.

Ask a Question

140

Ask Question

Ask Your Question

WalletHub Transparency

We are committed to being fully transparent with our readers. Opinions expressed here are the author’s and/or WalletHub editors'. WalletHub editorial content on this page is not provided, commissioned, reviewed, approved or otherwise endorsed by any company. In addition, it is not any company’s responsibility to ensure all questions are answered.